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CMF publishes regulations authorizing complementary activities of payment card operators

On October 11, 2023, the Financial Market Commission (theCMFor theCommissionmaking use of the power granted to it by Article 3, final paragraph, of Law No. 20. 950 on Issuance and Operation of Means of Payment by Non-Banking Entities, published General Regulation No. 498 (the "Normativa"), which regulates the complementary activities that may be developed by the Payment Card Operating Companies (the "Operators” o los “Operators"), which are the entities in charge of the settlement and/or payment of the benefits owed to the affiliated entities for the use of cards..

As a consequence of the foregoing, Circular No. 1 on Payment Card Operating Companies (the "First Amendment"") and Chapter 11-6 of the Updated Compilation of Rules for Banks (the "Second Amendment"hereinafter and togetherAmendments”).

The Amendments respond to the need to update the Operator market, as a result of the incorporation of new Operators to the payment system and as a consequence of the implementation of a 4-party model that arises from the regulatory modifications imparted by the Central Bank as of 2017 and that have implied a greater interaction among the different participants of the industry.

The first modification of the Regulation is the incorporation of a new Annex No. 5, which lists the complementary activities (the "Actividades") that the Operators may carry out.

These activities are as follows:

  1. Sales reporting and reconciliation service or cash balancing;
  2. Service of issuance of electronic invoices or receipts on its own or in association with another company for transactions made with any means of payment; and
  3. The collection of payments on behalf of third parties and processing of card payments, including the issuance of vouchers.vouchers).

In order for the Operators to be able to carry out the Activities, it will be sufficient to mention in its bylaws that the operating company may carry out, in addition to the activities pertaining to its exclusive line of business, the complementary activities authorized by the Commission.

The Operators may develop the Activities directly or through the outsourcing of services. In the second case, the responsibility will continue to fall on the Operators, which must, therefore, comply with the provisions regarding the risk of the main business, contained in chapter 20-7 of the Updated Compilation of Rules of the CMF.

On the other hand, the Second Amendment aims to equalize the regulatory framework among Operators. The foregoing considering the legal restrictions that prevent the Operators constituted as support companies for the banking business (SAG) from developing the Activities.

Thus, in the case of Operators owned by banks and incorporated as SAGs, they may request the elimination of the registration of such entities and their incorporation as SAGs.

As a consequence of the Modifications, it is expected that the Operators' activities will become more profitable, allowing them to expand their acquiring coverage to new merchants and improve access to the payment network. Secondly, the possibility of carrying out the Activities will encourage and make the development of the Operators' market more attractive, attracting new competitors, with the logical benefits that this entails for the market in general; in addition, the Regulations could allow the Operators to benefit from the diversification of the sources of their income; Finally, it is considered that the Activities could have a relevant contribution in complementing the offer of financial and technological services within the payment world, expanding the network and enabling the existence of a competition that is not based exclusively on the price of the services.

Should you require additional information on this matter, please contact Christian Schiessler Quililongo (cschiesslerq@jdf.cland/or Fernando Valenzuela Mac-Kellar (fvalenzuela@jdf.cl).

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